Gold price forces change on jewelry design

Some jewelry designers are searching for ways to cut back on the use of gold as its price increases again, this time on inflationary worries.  

Gold traded at $1,434 per troy ounce Wednesday, 26 percent higher than the year-earlier $1,135 per ounce. Designers are feeling significant pressure on their profit margins, and in some cases the price has even guided artistic trends.  

"It's interesting to see how people's work that you recognize has changed," said Whitney Abrams, owner of Whitney Abrams Jewelry in Chicago. "People are using a lot more stones, a lot more pearls, a lot more necklaces that are predominately stones with gold only in the clasp."

Many designers are also working with silver, even though its price has doubled over the last year. Silver traded at $34.62 per troy ounce Wednesday, compared with $16.92 a year earlier. But it's still far cheaper than gold.

The increase in gold reflects inflationary worries in emerging economies, said Benjamin Wey, president of New York Global Group, a New York- and Beijing-based middle-market firm with a focus on U.S.-China investments.

"There are real existing inflation problems in countries like China and other countries in the emerging markets, and people in these emerging markets want to buy gold as a preservation of value," Wey said. He predicted that gold could easily top $1,600 per troy ounce in the near term.

Since Abrams opened her shop six years ago, she's seen the price of gold more than triple. 

"A little gold leaf that used to cost me $10, now costs me $50" to make, Abrams said.  

Despite the upward pressure, Steven Moriarty said high gold prices have had little effect on his business.

"We haven't changed the weights we do in pieces," said Moriarty, who co-owns Moriarty's Gem Art in Crown Point with his wife, Nancy. "Of course it does affect the price of the jewelry, but there's just a limit to what you can sacrifice in weight without sacrificing the quality of the piece."

Moriarty said business at his shop is up 15 percent compared with the year earlier.

"We are sticking with gold, and we still make a heavyweight piece, and last year was the best year we've had."

Tom Tashey, jewelry appraiser and owner of Professional Gem Sciences in Chicago, pointed out that high prices have forced manufacturers to rethink the way they cast their products.  

"Manufacturers are looking for ways to make smaller things, thinner things, hollow gold rings and things like that," Tashey said.

(Source: http://www.nwitimes.com/business/local/8f42a384-d408-596f-b3df-4a7b88e571c1.html)